Listed companies in the GCC region saw their financial earnings hit a record high of $55.5 billion during Q3 2021, more than double on a year-on-year (y-o-y) and 23 percent on a quarter-on-quarter (q-o-q) basis.

A report on corporate earnings by Kamco Invest said that higher profitability reflected accelerated economic activity in the region with the PMI figures for Saudi Arabia and UAE consistently and comfortably above the growth mark of 50 at 57.7 and 55.7 during October 2021, respectively.

"The Covid-19 pandemic has largely remained under control over the last few months with declining cases as well as due to a fast-paced vaccination effort in the GCC. As a result, bulk of the economic sectors are back at pre-pandemic capacities barring a few that include Tourism and Hospitality sectors," Kamco said.

The energy sector reported the biggest absolute profits in the region at $29.7 billion, more than double y-o-y and 19 percent higher q-o-q. Profits for Saudi Aramco was up more than 146 percent y-o-y during Q3 at $29 billion, whereas the rest of the companies in the sector reported profits of $596 million in the quarter under review compared with a loss of $145.4 million in Q3-2020.

The Banking sector also reported higher profits during the quarter at $9.6 billion; a growth of over 36 percent y-o-y and 17 percent q-o-q. Dubai-listed banks reported more than two-fold increase in net profits in Q3-2021 followed by Kuwait and Bahrain listed banks.

The Transportation sector notched up a net profit of $3.34 billion in Q3-2021 versus $0.04 billion in Q3-2020, led by led by Kuwait's Agility that reported net profits of $3.1 billion during the quarter mainly due to a gain on sale of its logistics unit to DSV Panalpina.

Meanwhile, the Telecom sector reported a y-o-y fall in profits mainly led by a steep drop in profits reported by Ooredoo and Du.

Top performing exchanges

In terms of countries, aggregate net profits for Kuwait listed companies rose five times y-o-y to $5.6 billion in Q3-2021 against $0.97 billion in the year-ago quarter.

In the UAE, the companies listed on DFM saw net profit double in the quarter to $2.3 billion. Abu Dhabi ADX-listed corporates had a y-o-y growth of over 75 percent to $4.4 billion.

Aggregate net profits for Saudi Arabian listed companies rose over 123 percent y-o-y to $39 billion in Q3-2021.

(Reporting by Brinda Darasha; editing by Seban Scaria) 

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2021